BlueStone IPO Subdued on Day 2; Listing Concerns Remain

New Delhi, 11 August, 2025:The initial public offering (IPO) of BlueStone Jewellery and Lifestyle has continued to receive a subdued response, with the issue being subscribed only 3% on the second day of bidding. The lukewarm investor interest, particularly from institutional and high-net-worth individuals, has been further amplified by a grey market premium (GMP) that suggests a muted listing is on the horizon. The IPO, which opened on August 11, is scheduled to close on August 13.

As per data from the exchanges, the overall subscription stood at a paltry 3% by the end of Day 2. The retail portion of the issue was met with the most interest, being subscribed 15% of its total quota. However, the segments reserved for Non-Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs) saw minimal demand. The NII portion was subscribed just 2%, while the QIB category, which typically drives momentum, remained completely unsubscribed.

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The IPO is an attempt to raise ₹1,540.65 crore through a combination of a fresh issue of shares worth ₹820 crore and an offer for sale (OFS) of shares by existing investors. A price band of ₹492 to ₹517 per equity share has been set for the offering. A significant portion of the fresh issue proceeds, approximately ₹750 crore, is intended to be used for meeting the company’s working capital requirements, which are crucial for a business model that is heavily dependent on inventory.

The cautious sentiment among investors has been attributed to a combination of factors, including the company’s financial performance. While a strong growth in revenue was registered, with sales reaching over ₹1,770 crore in the last fiscal year, a net loss of more than ₹220 crore was also posted. This consistent record of losses, which has widened in recent years despite top-line growth, has been a key concern for analysts and investors. Concerns about the company’s valuation, which is considered high given its negative profitability, have also been voiced.

Furthermore, the grey market premium (GMP) for the shares has reflected the weak sentiment. The GMP has been hovering at around ₹17 per share, which translates to a potential listing gain of just over 3% from the upper price band. This is a stark contrast to recent IPOs that have seen robust subscription numbers and high GMPs, leading to a strong debut on the bourses.

While BlueStone has been recognized for its strengths, such as a strong omni-channel presence with 275 stores across 117 cities, its high gross margins, and a growing repeat customer base, these positives have seemingly been overshadowed by its ongoing profitability challenges and high inventory levels. The company’s heavy reliance on debt to fuel its aggressive expansion, as well as its competition with established players, are also factors being carefully considered by potential investors. The final day of the subscription period will be crucial for the IPO’s success, as a last-minute surge in demand from institutional investors would be needed to ensure a full subscription.